Manufacturing will reduce poverty, says survey

POVERTY can only be reduced if the manufacturing sector is rejuvenated, a survey has shown.

According to the survey, a stable macro-economy cannot translate to poverty reduction, where there is lack of infrastructure, irregular power supply and an unsound industrial policy.

The research was conducted by Dr. Chukwuma Agu, Dr. Hyacinth Ichoku and Dr. John Ataguba of the African Institute for Applied Economics (AIAE) . They investigated some households and their economic status.

The researchers said as commendable as the government’s efforts to provide 3.5 million jobs in the agriculture, housing construction, solid minerals, aviation and the creative industries is, the inability of the government to grow the manufacturing sector would make the vision impossible.

The research was commissioned by African Economic Research Consortium (AERC). It showed how the public sector has been crowding out the private sector, and how the much- talked about growth in the country is non-existent.

The work also examines the impact of sector of employment and selected demographic indicators at the household level.

Estimates, according to the report,were obtained for national level data and data from the six geopolitical zones. Determinants of poverty and inequality used in the study included both macro indicators and micro variables. And the findings are as interesting.

“For example, the work found that household size, region of origin and sector of employment are some of the most important determinants of the probability of a household being poor in Nigeria,” Agu said.

He added that many African countries that have posted high positive growth rates in the last decade have also seen significant rise in poverty.

He said: “Between 2004 and 2010 (a period of less than seven years), the proportion of Nigerians living in absolute poverty jumped from 54 per cent to 70 per cent. This is despite the fact that the country has grown at about seven per cent consistently for nearly one decade and has also designed a plethora of poverty reduction strategies at all tiers of government. Though it has always been known that growth is not always a sufficient condition for poverty reduction and that tackling poverty regularly requires targeted programmes, Nigeria’s experience presents an absolute paradox. Both policymakers and private individuals are concerned about the drivers of growth and poverty. It is difficult to understand that an agriculture-driven growth in a country with nearly 60 percent of the labour force employed in the sector should produce such adverse growth and poverty dynamics”.